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Costco Wholesale approached Regina’s Global Transportation Hub asking for a land deal – and not the other way around – according Daniel Hersche, the hub’s president and CEO.
On Wednesday, Regina City Council grudgingly voted to grant a $6.78 million incentive to Costco to build a second location on Dewdney Avenue and Pinkie Road. During the debate, many councillors said they felt frustrated about approving the incentive, saying they should not be competing with a business like the Global Transportation Hub (GTH), which is owned by the provincial government.
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Hersche said he’s happy the land developer and the City of Regina were able to come to a deal, as success in the Westerra neighbourhood benefits the hub.
Last year, the city approved a discretionary use application for a second Costco location on the western edge of the city, but the retailer found the development costs were too high. (980 CJME file photo)
“It is unfortunate that we are viewed as competing with them,” said Hersche, adding that Costco is “a private business” which can choose locations based on its own criteria.
Council had originally approved a discretionary use application last year, but the company released the site due to the costs associated with purchasing and developing the land.
After the site was released, Hersche said Costco contacted the distribution hub, hoping to strike a deal.
“I had been given an indications that they would have preferred to be at the GTH,” he said.
Hersche said the GTH will stick with distribution instead of retail, but he said the deal with Costco was considered because their stores are warehouses with big parking lots.
“It’s not a complete fit, but again, it’s not new for that business to locate (in) an industrial park, and that’s largely what we are,” he said.
Hersche wouldn’t discuss details of the deal his team was working towards with the retailer, but said the GTH sells its land for $300,000 per square acre.
Hersche has the hub has enjoyed a positive relationship with Regina City Council, and he hopes to do more work collaboratively in the future.
“I think maybe this is a time to have a little bit of a reset on our relationship to make sure we’re moving in a positive direction,” he said.
According to a city administration report, Costco’s location on Aurora Road brings in two million customers annually, with an average of 5,500 visits a day.
Costco pays the City of Regina over $500,000 in property tax a year, the report noted, with that same amount in property tax being brought in by adjacent businesses.
The property tax Costco will pay at the location on Dewdney Avenue and Pinkie Road will be recouped into the city’s Land Development Reserve until the $6.7 million is paid back.
